Flying under the radar

Tuesday

Jun 10, 2014 at 12:01 AM

TRACY - A grand jury found no evidence of a secret and illegal deal between City Hall and a local developer, but the investigators did note the city took an "alarming number" of actions to fulfill informal requests that could have reaped significant financial benefits for local developer Surland Cos.

Zachary K. Johnson

TRACY - A grand jury found no evidence of a secret and illegal deal between City Hall and a local developer, but the investigators did note the city took an "alarming number" of actions to fulfill informal requests that could have reaped significant financial benefits for local developer Surland Cos.

The requests - which included shaving a few feet off the official length of one of the runways at Tracy Municipal Airport - were in exchange for $425,000 the developer would pay to the city between 2013 and 2022, according to the report released Monday by the San Joaquin County 2013-2014 Grand Jury.

In its conclusion, the grand jury questions whether there was a specific "quid pro quo" agreement between the city and the developer or just an unspoken "wink-wink" acknowledgement what the results would be.

Regardless, the case damaged the city's credibility, the report states.

"If the City Council and staff conducted City business as if they were in a glass room with unobstructed view by the citizenry, then transparency would not be an issue and the trust from the people they represent would be earned."

The City Council is required to respond to the grand jury's report within 90 days. City officials said that is when they would have a formal response to all the findings and recommendations in the report. "I'll reserve comment until we formulate our response," interim City Manager Maria Hurtado said. "We will be able to correct any factual errors ... to make a clear depiction of our city processes."

Hurtado declined to identify the errors, but she said she was pleased the grand jury did note it found no evidence of a secret and illegal deal. "I'm glad that they came to that conclusion."

Surland Cos. did not immediately respond to a call for comment on Monday afternoon.

The business is developing the 2,250-unit housing Ellis project near the airport on the southwest outskirts of Tracy.

Shortening the runway to less than 4,000 feet would change the federal classification of the airport from medium to small, a designation that could change the requirements of maintaining a safety zone around the airport. For the Ellis project, the change could make it possible to put from four- to nine-units-per-acre in the area immediately surrounding the airport, instead of just one unit every 5 acres, according to city documents.

Shortening the runway was part of a list of contingencies listed in an April 2013 memo from the developer in exchange for a financial commitment over the next 10 years, according to the grand jury report.

On June 18, the City Council voted to approve a staff recommendation to reduce the length of the runway from 4,002 feet to 3,997 feet. On June 19, the developer gave a $50,000 check to the city, stating it was to assist the fuel provider at the airport. The city has since taken over as the airport's fuel provider.

On their own, each action taken by the city was neither illegal nor inappropriate, the grand jury notes. "Cumulatively, however, they appear to result in a single beneficiary - the local developer of the Ellis Specific Plan," the grand jury reports. "While the City Council actions did not result in the benefits sought by the local developer, the Grand Jury made recommendations to strengthen the City of Tracy's associated internal policies and procedures," according to a statement from the jury announcing the report.

In one finding, the grand jury said city staff provided "inaccurate and incomplete" information at that June 18 meeting about the runway change to the council that could have hurt the ability to get future grants.

"Whether it was intentional or incompetence - it's not good," said Steve Nicolaou, a Tracy attorney who has been critical of the city's dealings with the airport.

He said he was not the one who went to the grand jury with his concerns, but he approved of the report.

"I think it boils down to: We need to have transparency here."

Contact reporter Zachary K. Johnson at (209) 546-8258 or zjohnson@recordnet.com. Follow him at recordnet.com/johnsonblog and on Twitter @zacharykjohnson.

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